SSC
GENERAL ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An increase in supply or a shift of the supply curve to the right occurs when:
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A rise in input costs happens
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If Government pays subsidies for a good.
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If producers expect the price to fall in the future.
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If government regulates a good.
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Explanation:
Detailed explanation-1: -A subsidy will shift the supply curve to the right and therefore lower the equilibrium price in a market. The aim of the subsidy is to encourage production of the good and it has the effect of shifting the supply curve to the right (shifting it vertically downwards by the amount of the subsidy).
Detailed explanation-2: -Shifts of the supply curve occur when quantities of a product or service supplied change at every given price in response to other economic factors. If the quantity of the product/service supplied at each price level increases due to economic factors other than price, the respective supply curve would shift rightward.
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